Q: Can you get a single "series" LLC in Colorado for multiple rental properties or do you need separate LLCs for each?

A: Dear Colorado Rental Property Owner: there is nothing precluding the placing of multiple property titles in the same Colorado LLC, but there are several cautionary "tales": (1) a lender will not supply the owner with mortgage loan on the fifth property inside the same LLC - in other words a lender requires there to be a maximum of four properties inside any one LLC; and (2) the purpose of an LLC is to limit potential exposure to litigating plaintiffs, and to limit the assets to which a successful litigant may attach a judgment. What does this mean ? understand that a litigating plaintiff may seek the assets of a defendant LLC (hypothetical: a gas line leak in Property A results in the death of five family members whom seek $5m in damages and your insurance on property A is only $2m, thereby resulting in plaintiffs' attorney suing the entity that owned Property A and all assets contained in that entity). If you had, say, three properties (Property A, B, and C) titled and owned by the one/same LLC and if there is a modicum of equity in the cumulative total of those three properties (say that the total equity in Properties A, B, and C is $1m for our hypothetical), then the litigating plaintiff whom is suing the LLC for injury occurring at Property A is entitled to seek the balance of the damages they are pursuing ($3m in our hypothetical) from the equity contained in that LLC. The advantage with separate property LLC formations is that the litigating party is precluded from trying to pursue their alleged damages from among the assets contained in the other non-party LLC entities. I trust this helps in your decision-making.

JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate transactions for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party.